Shi$ing Governance Structures in the Wheat Value Chain: Implica:ons for Food Security in the Middle East and North Africa Ghada Ahmed, Danny Hamrick & Gary Gereffi Center on Globaliza:on, Governance & Compe::veness Duke University Global Value Chains and Trade Policies for Food and Nutri:on Security Workshop Rome September 26 2014
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Shi$ing Governance Structures in the Wheat Value Chain:
Implica:ons for Food Security in the Middle East and North Africa
Ghada Ahmed, Danny Hamrick & Gary Gereffi
Center on Globaliza:on, Governance & Compe::veness Duke University
Global Value Chains and Trade Policies for Food and Nutri:on Security Workshop Rome
September 26 2014
Outline
• Project overview • Approach • Wheat Industry GVC • Wheat Trade and Chain Governance • MENA’s wheat GVC & Country Cases • Implica:ons for MENA • Conclusion
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• GVC lens to unpack food security in MENA • Focus on wheat • Country-‐level case studies: Egypt, Iran, Saudi Arabia,
Syria, United Arab Emirates, and Algeria • Compara:ve analysis of wheat GVCs and food security
strategies • GOAL: Use GVC framework to analyze MENA
vulnerabili:es & design more resilient food security strategies at the regional level
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The Project
Top down – the global economy with a focus on lead firms and inter-‐firm networks, using varied typologies of industrial “governance”
BoMom up – a focus on countries and regions, which are analyzed in terms of various trajectories of economic and social “upgrading” or “downgrading” 4
Approach
Impact of Food Price Increases on Trade Balance (2007-‐2008)
Global traders drive the flow of wheat & are involved in most of the VC Governments influence segments of the chain through grain standards, subsidies, marke:ng and trade.
Key Events that Influenced Wheat Trade
9 Source: CGGC based on literature review
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State monopolies control trade
Transforma:on in the VC Growth in TNCs
Deregula:on
Consolida:on
Globaliza:on
Financializa:on
Trade liberaliza:on, deregula:on & priva:za:on of wheat boards
Started in agrochemicals around 1960s to improve output
Accelerated by mid-‐2000s TNCs acquire input suppliers, small and large players in grain infrastructure
TNCs opened overseas offices & invested in mills and elevators
TNCs invest in overseas assets, export facili:es, partnerships, technology and data analy:cs
TNCs use forward future contracts & hedging to manage risk
TNCs finance investments through public offerings, expand risk management & financial opera:ons
Different regions within MENA rely on different countries as their leading source of imported wheat. Depending on the country, these rela:onships have persisted since 2007